GA 126 | Scaling Lean with Ash Maurya

You're listening to episode 126 with Ash Moria. Welcome to the Gemba Academy podcast, the show that's focused on helping individuals and companies achieve breakthrough results using the same continuous improvement principles leveraged by companies such as Toyota Del Monte and the U.S. department of Defense. And now, here's your host, Ron Pereira. Hey there. This is Ron Pereira with Gemba Academy, and I'd like to welcome you to another edition of the Gemba Academy podcast. As always, thank you so much. Welcome for taking time out of your day and your week to listen to the show and for watching our lean and six segment training videos over at GembaCademy.com, we definitely appreciate each and every one of you. Now today, I'm excited to welcome Ash Mauria to the show. Now, Ash is an entrepreneur and he's an author and he's really done a lot of work in the lean startup space. So what we're going to do today is just kind of explore his journey into Lean and just continuous improvement and how he's been able to apply that to the world of entrepreneurship. And he's, he does a nice. Gives a nice overview of the lean startup methodology which we explored with Eric Reese, oh, about a year or so ago. I guess it was episode 36 back when we did that. So Ash is a great guy and I think you're gonna love the show. He's written two books that we do get into. The first one is called Running Lean and the second is Scaling Lean and we'll link to those in the show notes and highly encourage everybody to go check those out. So show notes for this episode will be found over@gembapodcast.com just look for episode 126126. So Gemba. And look for episode 126. Okay, enough from me. Let's get to the show. All right, Ash, well, thanks so much for coming onto the show. Where are you calling in from?

I'm here in my home in Austin, Texas.

All right, beautiful. Not too far away. Not too far away. All right. Nice day in Austin. Lots of deer running around. Seems like there's a lot of deer every time in Austin. I don't know what's going on down there.

We do have some deer, but not where I am, but yeah, there's some parks around here and you'll see them every now and then.

Yeah, yeah, yeah. Good deal. Good deal. All right, well, thanks for coming on. Let's go ahead and just kind of start with you sharing a little bit about your background. And maybe how you first came to learn about continuous improvement.

Sure. So I often tell people my kind of my one line bio is I'm a practicing entrepreneur. I came into all this just by way of trying to make sense of this crazy world of entrepreneurship, building things that customers want. And along the way, a number of people, not just me, but a number of people, began to look at some of the core principles in Lean, essentially putting the customer at the center. And that's how all this started. And it eventually mushroomed into what became the Lean startup. And I kind of took that and built upon that, and all my work is now kind of very much centered around that kind of thinking.

Now, do you have. I guess I know about leanstack.com and whatnot, but do you have other businesses that you're involved in or how is that working?

Yeah, so I've always had this philosophy, and it's just my way of doing things is I create one umbrella company and then build many products within it. But they all have to tie together around one mission, one vision. I don't do anything else. So prior to this, I was doing something completely different in the networking space, large file sharing, that kind of stuff. A tech company. But even there, I built multiple products, but they all kind of leveraged all the assets that the company had. With Lean Stack, Yes. I believe in focusing just on one thing. So for me, that's it. So there are lots of products within it, but it's still that one focus.

Yeah. Yeah. Well, I want to talk about your books as well here later in the show, but. So you've written two books, right? Running Lean and Scaling Lean.

That's right, yeah.

Okay. Well, I want to definitely explore those later on here in the show, but as you know, we like to kind of begin with our guests sharing a quote or two that possibly inspires them. So do you have one?

I'll share two. So I used to have a favorite code, and that's what really inspired me into all of this. And that one was, life's too short to build something nobody wants. Probably doesn't require a lot of explanation. I built many products and then realized that it was more important to build a right product than just to always pretend to be right. So that's where that first one kind of started me in this journey. But as I've dug deeper, my new code and the new tagline that I've been sharing everywhere is, love the problem, not your solution.

That's pretty deep.

Yeah. And I know we can spend, I spend sometimes days Just, yeah, I was.

Going to say that could be like years, really. It's kind of like one of those math problems that can't be solved. Right. All right, well, good stuff. So as we were talking before we came on, I took a. I listened to our friend Mark Gribben's podcast with you, and it was really, really good stuff. And we'll link to that in the show notes for people if they want to go hear that. Something that you said when you were talking to Mark that I really intrigued me was how in the beginning of your, I guess, really your journey with Lean, if you will, was that you read some books, Theory the Goal, Elia, who got Gold Rat and various Toyota kind of based books, and I would say traditional lean thinking books. Right. And. And so I always find curious for folks that aren't, you know, let's say traditional manufacturing type people, like, what are you thinking when you read about, you know, the goal or you read about, you know, out was his name Alex Rogo or whatever? You know, it's like, how are you, how are you taking those principles and saying, this kind of makes sense in my world? And the reason I asked this is because it's so easy for folks to say, oh, my business is different, or we don't make cars, you know, and. And so forth. This stuff doesn't apply to me. But obviously you're able to take these traditionally thought manufacturing principles and apply it to your work. So how does that work?

Yeah, so I think the first bridge and that made it easier is that the software world just started to pick up on some of those principles. Because if we look at the software factory, we manufacture things as well. They're just bits and bytes at the end of the day, not physical products. But we still have people who work on them. There's still waste. And so Mary Poppendick and Tom Poppendick wrote a book called Lean Software that influenced a lot of How Agile and started to veer more into the Lean type of thinking. So that was the first intro, and I think that was a fairly enough straightforward segue. But how this got applied to innovation and business modeling for me was realizing one day that this light bulb went off where I said, fundamentally, every business is the same. We're all in the business of manufacturing customers. No business out there, no matter whether you're B2B or a not for profit, says they don't care about customers or don't care about making customers. And then what I also began to realize is that there's actually a process with which you make customers. There's a blueprint, there are steps that you put people in through who may never have heard about you, and then you activate them, then you engage them, you deliver value to them, and then they become customers and they refer your business. So there was a blueprint for doing that. And so that was the metaphor that I kind of began to play with. I said, if we have the physical factory, the manufacturing factory, we have a software factory, well, why not have a customer factory as well? And I kind of played with that idea and it was uncanny how many things just began to fit together. And that's just what excites me. I tend to be more of a metaphors, analogy kind of person. I read a lot of stuff and I'm always looking for patterns. I'm always looking for synthesizing things from different places because I think that makes it more fun and actually creates new bodies of work that could go further that way.

So when you think about, like in the book the Goal, where they talked about Herbie, you know, the overweight kid with this big backpack full of junk, you know, like, how were you able to take that type of a principle, which again, is very straightforward in a manufacturing environment, how to take that sort of a principle and apply it to your. Your work, even software.

Yeah. So my first foray into Lean was kind of around this mantra of removing waste. And I always had issue with that because in a startup we don't have. There's waste everywhere, so we don't have a single place that we can go optimize. When you ask a startup founder, what are you working on today? He said, I wish on everything, because there's waste all over the place. And so for me, the Goal was particularly refreshing because here Eliyahu Goldwright was saying is that in any system there's going to be a few or a single constraint. And if you identify that and double down on that one, you're going to have the biggest impact. And I heard many entrepreneurs say this in a more philosophical sense, find a single domino, focus on the right actions at the right time. And there was no way to really systematically figure out what that right thing was. But that again, was inspiration to dig deeper. And those are some of the questions I try to answer in that startup context.

Yeah, I still think the Goal is one of the best kind of business books ever. My wife read it and she has no interest in this stuff. She was hooked. So. Well, we've had Eric Reese on the show before. I think it was actually episode 36. If people want to go back and listen to that one. It was really good, good show. Eric's a great guy and obviously we explored kind of that lean startup movement. But in case folks didn't hear that episode, can you maybe offer an overview of how link thinking is being applied, let's say by entrepreneurs?

Yeah. So again, I talked about some of the core principles, one of removing waste. But really, I think fundamentally what Lean startup internalizes from the lean thinking world is this idea of customer value and how we can measure all kinds of things along the way, like how much stuff we build and how much money we raise. But at the end of the day, it's really about getting to the heart of creating, delivering and capturing that customer value. In the lean startup. The way that we do this is using a three part process. So much like in Lean, we have got the Deming cycle, for instance here Eric simplified that and it's the build, measure, learn, loop. So we come up with some ideas of a business or a product, we build something, we put it in front of customers, we don't keep it to ourselves. We have to test with customers and we don't really ask them what they think. We rather measure what they do or have done in the past. And that's a very key second step. And then based on those observations, based on that learning, we're going to gather insights which will fuel that build, measure, learn, loop. And that fundamentally is like that maybe the quick, high level view of what that lean startup process would look like.

Yeah. So I guess when we're in that building phase, we often hear about the minimally viable product. Right? Like just kind of put something out there and let people vote on it. My question has always been, how long do you let them vote? You know, somebody, for example, starts a blog and they're really passionate about their topic and so they're banging out blog articles every day and they're just not getting a lot of momentum and not a lot of readers and so forth. How long should they continue to bang out articles before they say we need to pivot? This isn't working.

Yeah. So there's maybe two parts to that answer. I guess the first one is that oftentimes probably when you launch something new, nobody gets it. And so people often come to me and say, well, what does going and talking to 10 customers teach me? Well, if all 10 people say no to you, that is statistically significant. You don't have to go and run some regression analysis to figure out what the conclusion was. So that usually happens in the Beginning, because you're just going to be way off. But your question was more about when you start getting those mixed signals or there's kind of growth, but it's not as fast as expected. That's where I'm a big advocate of timeboxing and setting a goal. You brought up the Eliyahu goal Rat book, but I think you have to always start with a goal and that's going to change the strategy that you employ. When I wrote my first book, I didn't have a goal of writing a best seller. And so what I did was very different from when I wrote my second book, where that goal had changed. And so I began to do things very, very differently towards that goal. So as a, as an entrepreneur too, you have to have some kind of a goal. It could be a revenue goal, it could be a valuation goal, it could be an exit goal. Doesn't really matter. But without that clarity, any road that you take will seem like it's okay or not okay, depending on who you talk to. To me, that's step one. The second part is you want to kind of lay out some kind of a roadmap for what are some time boxes, for some milestones to get there. And it sounds very basic, but I just find so many people don't do this. And it's hard to do, especially when we're talking about innovation, because things are so sometimes feel like they're intangible. But even in the blog post example, if your goal is to create a certain kind of impact, you can do analysis to figure out how big, ballpark what that market size is, ballpark how many readers or engaged users you would like to get and then create some kind of a roadmap. And I'm a big fan of the 10x roadmap. So if you wanted to hit. If your goal was to get to 10,000 engaged readers by the end of the year, let's start with 10 engaged readers. And if you can get 10, let's figure out how to get 100. If you get 100, then go to 1,000, then 10,000. So that step function allows people to manage the complexity and also manage the risks and then put some time boxes next to them to keep them accountable.

I love it. I love it. I'm curious. I always like to ask this question because it's varying opinions. What are your thoughts on just the terms lean startup? And if you had to name it back in the day, would you have called it something else?

Absolutely. And I think Eric would maybe if you asked him that question would probably wish he had called it something else. So I'll start with the second one first. The startup, I think made sense because this was all coming out of the startup world and he was writing with that prototypical kind of audience in mind. But as we have seen, the lean startup has been applied in so many different places, and now more so. I see my business kind of going the route of still innovation, but large companies, large companies wanting to apply these principles for new product introductions, new product innovation. So in the beginning that was a problem because many of them would say, we're not a startup, we're a massive company and this stuff doesn't apply to us. So that was the first, that was the problem. And Eric in his book defined or tried to redefine the word startup. I don't know how, how far he. I mean, from the book success, he got very far. But I don't know that people use that definition. I don't think a definition hit public domain, but the other word, lean. And again, he was being respectful for his sources of inspiration and that's why he picked that word. But the problem with it is that it often will get misconstrued as being cheap or bootstrapping. And so people would say, I'm being lean because I'm not spending money. And one of the things we talk about in the lean startup is that it's not really the amount. So we do want to be efficient on resources, but money is not one of those. If you can spend more money and get the learning faster, time is the scarcest resource. If you can maximize your learning per unit time by spending more money, then that is the right thing to do. So for those reasons, those would be some of the issues I've had with the lean startup and explaining it to people. But as with everything with names, I don't know that I could on the spot. I've tried to think of a better name. I can tell you what are better names like growth. Hacking, I think, is a great term because everybody wants growth. Everyone thinks hacking at least is kind of cool. It can be seen negatively too, but that just makes sense. It tells you what it is. Steve Blank came up with customer development. I think that was great because you could play it off of product development. Much like you develop products, you have to develop your customers. So I think those terms were better terms. But Eric stuck with lean startup and did a massive job of spreading it. And I think now it's in the vocabulary. So we'd call it anything and it still would Be okay.

Yeah, Yeah. I mean, I actually asked several years ago, we had James Womack and these guys on, and that question was asked, if you had to go back and do it again, would you have called it something different? And, you know, their basic response was, we did the best we could, you know, at the time. And yeah, sure, it's easy to second guess, but. But, yeah, well, it's.

It's.

It sure helped a lot of people. So whatever you want to call it, you know, sometimes I just. I get a little sick of all the labels that we put on stuff. Anyhow, it's like, if it. Is it helping you, great. Do that. Right? So. All right, well, let's talk a little bit about. About your two books, Running Lean and Scaling Lean. And Running Lean was your first book. So I guess my. The first generic question I have before you get into each one is, should you read Running Lean first? Do you suggest that, or is it okay if they haven't read either to jump into Scaling Lean?

Yeah, so that's an interesting question. And I get that a lot, obviously. And the titles would suggest that. And I. And there is a natural. The books were written in that order. So there is that natural inclination to start with Running Lean and then Scaling Lean. But the reason I hesitate a bit is that if I could go back in time, I would probably take some aspects of Running Lean and Scaling Lean and write book number one, and then some aspects of both and write book number two. Part of the reason is that the audience or the conversation is a different kind. So I'll explain. Running Lean was all kind of written with the entrepreneur in mind, the entrepreneur that wants to go start a new project. And the big epiphany in that book was recognizing that just building a great solution, which is where that code comes from. Love the problem, not your solution is what everyone was trying to do. And oftentimes they build something nobody wants. The big epiphany there was realizing that it wasn't your solution by itself. It rather was thinking of the business model as the product. That was the goal of getting off the book. And then it went into a lot of tactical techniques for how an entrepreneur could go and engage with customers and try to figure out what they want, what they need without directly asking them. So there I channeled Steve Jobs in the book. I talk about how, as he said, customers are not in the business of knowing what they want. That's really our jobs as the innovators to go figure that out. So that was what that book was. It was about the entrepreneur to customer conversation. And then what I found is that the book did well. It got people excited. They went outside the building, they were doing all these. All this learning. They came back, built their MVPs, came back with the learning, went to their stakeholders, and the stakeholders said, that's great, but it's still just a toy. You only have 10 people or 100 people. And your question, I don't know if this is big enough yet. I don't know if we should invest in it, because they couldn't see the goal and they couldn't see the traction model. So that's what I went to answer with the second book. So the second book really talks about, still puts the entrepreneur in the driving seat, but talks about, how would you share your idea now not with a customer, but with a stakeholder, with an investor, with a budget gatekeeper, even with yourself? Because even if you are bootstrapping, you are investing time, as I said, more valuable than money. So you have to critically think about, is this a big enough problem for me to spend years of my life on?

Or your wife.

Or your wife. Yeah. That's usually the CFO in the housing.

Yeah.

So, yeah. So for me, that's again, so the books kind of have maturity because one came after the other. So you can definitely see that, I think, in the thinking. But as far as the problems, I find that at the starting gate, you're going to have the same challenges. You're going to have to figure out, what do I build for customers? And then very shortly after, figure out, how do I communicate this to my stakeholders so I can get the necessary resources to move forward.

Got it. All right. Running lead and scaling, and we'll link to them in our show notes so folks can go check those books out. That'd be great. So. All right, well, let's go ahead and transition now into the reflection section. And the first question. You know, we spent a lot of time in Lean talking about the kind of those two pillars, continuous improvements, the tools, the things that we do, and then respect for people. And respect for people, it can be much harder to define. So I'm curious, what does respect for people mean to you?

For me, it means actively listening. So I think everyone has an opinion, Everyone has a perspective. And we often think we understand what the person is saying. And there's an art to kind of actively listen and get to the whys. And sometimes you can change their opinions, sometimes you can. But I think that is, you know, that to me, is what respect means. And, you know, When I talk about interview techniques with customers and also when I go back to that quote, love the problem, not your solution. You sometimes will think you're hearing a problem, but even there it could be a solution disguised, it could just be a solution that is disguised as a problem and not really the heart of it. So to me, a lot of that respect goes into just digging deeper in a respectful manner. We talk a lot about five whys and you can like a three year old, go and blatantly ask five whys of your customers or of your employees, but there's an art to kind of how you can get that out from them.

What's the best advice you've ever received?

Best advice was to kind of. It's what I think has influenced the kinds of the focus that I talked about with the one company kind of mindset. The best advice I received was from an advisor who always questioned what is the kind of the one mission of the company? And when he saw that I had multiple missions, he would always steer me back to no, you only need to have that one mission. So in my previous life I would start many different projects at once. And so I've learned that it's much better not to multitask but to unit task. And it's perfectly fine to have a big vision and do multiple things, but they all need to add up to one hole at the end. Right?

Do you have a personal productivity habit that others might benefit from?

It's something I wrote. So I actually have a post called how to achieve Flow as a lean startup practitioner. And one of the challenges I found with just lean in general is that you tend to become a generalist, you tend to become cross functional. You have to do maker stuff and manager stuff kind of at the same time. And so I was very accomplishment driven. And if I just went outside and talked to customers sometimes it didn't feel like I was doing productive work because I didn't write code or build product or whatever. And so for me, my hack for that, and I still do that to this day, is I organize my day so I do my maker activities, the ones that need uninterrupted work, very early in the morning. So I'll actually get. I didn't used to be a morning person. I will get up early. If you're a night owl, you can stay up late. But getting that one thing done allows me to then relax and then do other things throughout the day and still feel like I accomplished something that day.

Give me an example of a maker item.

Yeah. So When I used to write code, and I've stopped doing that now because they're better people than myself. And I also realized that I was better at writing than writing code. But when I used to write code, that would be a great example. If I was building, I was trying to solve a hard problem. I would just wake up early. So between the hours of say 5 and 7 or 5 and 8, I would just not turn on any distractions. And no email, no Twitter, none of that stuff. And just focusing on that task. Nowadays, as I mentioned, writing is my core key activity. And so I get up every day and I write something or I create content of some sort.

Yes, yes, got it. So over this past year, has there been anything that surprised you as it relates to kind of just lean thinking within your world?

I think it surprised me and that's why I keep just going back to the code. Not because I want to drill it into your readers minds, but I find that what I've always found it surprising how we think we understand something, but then you see evidence of that not happening. So a lot of the lean startup seems like common sense, but when we go back and look at people's practices, we find that that isn't the case. And so even the love the problem, not your solution. I will oftentimes see all kinds of things. I will see people who will say, okay, I'm not going to think about my solution. But then they'll describe the problems as if they were kind of feature requests for that solution. So they didn't really get the problem, they just disguised it as. They disguised their solution as a set of questions which made it look like a problem. So I see a lot of that kind of stuff and I think fundamentally, as I said, I can talk about that one thing for days because it manifests itself, it rears its ugly head over and over again. Even in our own team, which we pride ourselves as being very lean in our approach, we will often see when faced with the problem, we will come up with solutions that are very biased. So my designer may want to go and redesign a website magically and my developer may want to build more features. My marketers may want to go and buy some ads. And again, not a problem by itself, but you just have to be aware that that is happening and then you have to kind of manage for that. So that has always been very surprising how, how biased we are. And we tend to fool ourselves without even knowing it.

Yeah, it's almost like kind of the batch mindset, right? Or the siloed mindset. Right. Everybody's in their own little silo. So is there a routine or ritual that you follow when things aren't going well and you need to just kind of recharge and refocus?

Yeah, so I'm very big on yoga, so that's probably the thing that I do. I've started to do a more of a daily practice now, so that's kind of built in and it allows me to just continually recharge. And I really describe it as that. It's like a pit stop. Most workouts that I've done kind of leave me energized, but I'm kind of low on energy and here I have the opposite effect. So I've started to just build that into the routine. But in the past, yes, if I was kind of in that zone, I would either try to go to a class or I would try to just do some exercise. But exercise is usually what gets me out of, out of the rut.

Yeah, me too. I love it. All right, so I'm going to kind of change this last question up a little bit. I normally ask if there's a knowledge or skill area that you need to improve, which you can still answer if you'd like. But I'm really curious to get your perspective on what's next for the so called lean startup movement. Like what do you think is going to, what's it going to look like in five years?

Yeah, so I think what Eric has been very smart and also I think very kind of forward thinking about is he has kept lean very loosely structured. So there's no dogma in there. There are no hard and fast rules. He's the first person to say, I'm not here to tell you what is and isn't lean, but if you are blatantly abusing it and for a profit or for some other reason, he might set his foot down because he does have the trademark on the term. But I haven't seen any evidence of that, at least in my dealings or seeing others kind of interact with them. So what is nice about that is that it's a nice umbrella kind of methodology where we are all a bunch of practitioners that are trying to push the envelope forward. I see a lot of work being done now kind of, as I said, on the corporate side. So the problem has been known. We know that innovation needs to happen, otherwise large companies start to lose their, their business model strength. But how that happens is the challenging part. So a lot of work I know is being done there and I think Collectively, there will be some best practices that will begin to evolve. Some will work, some won't work, and that's just natural. But everywhere we look, I think there's just a deeper practice of Lean simply because it kind of embraces principles and not tactics. And those principles, if they're crafted right, are timeless, like some of the original Lean thinking. And I think they will last a really long time. On the flip side, I would at the end also just say that a lot of what is packaged under Lean Startup is not necessarily. Sometimes people will look at that and say, oh, this is not original thinking. It's really a bunch of hodgepodge of collection of best practices. And that is partly true. But what I find that is very powerful that the Lean Startup has been able to do is it's created universal language, a common vocabulary. Just going back 10 years, I couldn't have a conversation with a medtech engineer or biotech engineer or scientist simply because we lived in different worlds. But I've actually been in rooms with them and we have talked about their products and we've talked about the innovation challenges. And because we have got this language now, we can do that. And I think that is very powerful.

Yeah, well, someone could even say the same thing just about Lean or Six Sigma. It's nothing new, Right. It's stuff that's existed for hundreds of years, you know, thousands of years even, and it's just been packaged in a really nice way.

That's right.

All right, very good. Well, Ash, how can people get ahold of you? What's the best way to connect with you?

So the best place to find me and everything I do is@leanstack.com that's where you can find some of my writings, you can find some of the products we build, and you also find my contact information there.

Yeah. What's this quick story behind Lean Stack? What's that name mean?

We had a number of different products and so this was just a consolidation. We just took all the Lean stuff. So I have a Lean Canvas product, which is the one page business modeling tool. The books were called Running Lean Scaling Lean. And so we just said, we have a stack of Lean stuff. Let's just call it Lean Stack.

Got it, got it.

And it's kind of like you can also, you can play on it and say, this is the stack that you need to practice this Lean or Lean Startup. But yeah, that's just how the name came about.

Kind of like my Evernote Stack. Right, yeah, got it. All right. All right, well, thanks. So much, Ash. Hopefully we get to meet in person one day. And I appreciate you carving out some time and. Yeah, have a great day.

It was a pleasure, Ron. Thanks for having me.

All right, take care.

Take care. Thanks.

Thanks for listening to the Gemba Academy podcast. Now it's time to take a few free, no strings attached, fully functional test drive of Gemba Academy's School of Lean and Six Sigma. Over at Gembaacademy.com gain immediate access to more than 500 Lean and Six Sigma training videos free of charge@gembaacademy.com.